The exchange rate between the EUR/CHF, which has been traded in an extremely tight range since April at just over 1.200, spiked from 66 pips from 1.2010 then collapsed lower by 50 pips.

There are rumors flying around that official at the Swiss National Bank, which has been supporting the price of the Swiss Franc by defending the 1.200 level, placed a fat finger trade.

Other rumors - and this is the one that is really interesting- says that the foreigners with deposits in CHF will be taxed. This rumor is unconfirmed.

Dow Jones is reporting that the sudden spike is the result of lack of liquidity. "Liquidity is completely one-sided in [the euro/Swiss franc exchange rate] and the exit door is almost non-existent," according to a trader.